A Retirement Plan Rx
The physicians’ niche is a great place to be, but it comes with unique challenges—including high income, high intelligence, and loads of debt.
“They have a huge battle right out of med school,” Jake Rushton, Vice President Retirement Services with Utah-based TrueNorth Wealth, explains. “They’re already in the hole and then go straight into a high tax bracket, so they get hit on both sides.”
It’s a unique situation where, if they’re smart in how they set themselves up (meaning early), they can achieve financial independence much younger than most.
“You see it with so many; they either did or they didn’t plan right, there’s no in-between. You’ll have two doctors who are the same age, with the same scenario and same type of practice, but completely different financial outcomes.”
Because it’s a niche, Rushton doesn’t have many of the same scale issues with which other 401(k) plan advisors must deal and can, therefore, spend more one-on-one time with each participant. He and TrueNorth founder Marty Watkins recently spent two full days in meetings with 20 different doctors, each at a different point in their career.
“We helped the junior partner just out of residency who has no assets, and there were others that were on their way out the door. The variety of situations we see are drastic, but we get the process right, which quickly gains trust.”
It sparks a follow-up question—Rushton’s a relatively young guy, so how, specifically, does he win them over (especially those close to retirement)?
“I try to keep a beard and look a little older,” he laughs. “The key is to spend time in understanding their situation, not only in the retirement plan, but the pain points a physician feels both as a practitioner and an employee.”
It might be their negotiations with different hospitals, insurance, and everything else that goes into their profession aside from the actual medicine.
“I sat down with a one that was nervous about COVID and all the uncertainty,” Rushton relates. “He was never transparent with his retirement plan, but because he lacked confidence he finally opened up.”
Not only was he fine, but the work and research the physician had done on his own set him up to weather the COVID storm, and (if he wanted) he could retire immediately.
“Seeing someone go from, ‘I have to keep working because I don’t know if I can ever continue to afford my lifestyle,’ to having that confidence and peace of mind for his family is a big part of why I love what I do.”
Noting that the extensive schooling physicians receive also means they’re prone to overthink, he sees his role as something of a retirement plan “second opinion.”
“In this particular case, he didn’t believe me, so I went through the math from beginning to end to show him that he could stop working that day and be fine. Nothing about his lifestyle would need to change. That’s just a fun conversation to have.”
Jake Rushton, AIF, is Vice President Retirement Services with Utah-based TrueNorth Wealth.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
